Fairholme Seeks to Profit From Growing Interest in Fannie, Freddie

By

Nick Timiraos

Updated Nov. 14, 2013 9:05 p.m. ET

Fairholme Capital Management's offer to buy parts of Fannie Mae and Freddie Mac isn't likely to fly for now in Washington, say analysts, but the mutual-fund company is gambling that the move creates a new avenue for it to profit from its growing investment in the companies' shares.

Bruce Berkowitz, Fairholme's chief investment officer, made the offer Wednesday to acquire a portion of the companies and recapitalize them in a deal it...